Question

$1000 is depostied in an account with an interest of 6.5%.Interest is compunded continuously, and no deposits orwithdrawals are made. Find the amount in the account at the endof three years

Answer 1

Given:

Principal amount -1000

Interest =6.5 %

Time = 3 years.

The compound interest formula is

`A=P(1+r)^t`

Substitute P=1000, r=6.5/100 and t=3, we get

`A=1000(1+(6.5)/(100))^3`

`A=1000(1+0.065)^3`

`A=1000(1.065)^3`
`A=1207.9496`

The amount in the account at the end of three years is $ 1207.95.